Blue Dot has a new way to share with friends

Social networking sites such as MySpace and Facebook have built large communities of users by giving people tools to build customized Web sites and then share some of that information with friends.

Now, a Seattle startup led by former Microsoft Corp. and Amazon.com engineers is looking to carve out some territory in the fiercely competitive sector with a new service called Blue Dot.

Expected to debut today at the Gnomedex conference in Seattle, Blue Dot wants to take the social networking concept to the next level by helping individuals share news stories, videos and other Web content with small groups of friends or larger preset communities. It also wants to help people discover more relevant information -- say good sushi restaurants in Seattle or honest auto mechanics in Tacoma -- by allowing them to search recent recommendations of friends or family.

Blue Dot's Kabir Shahani, whose title is listed as Dot Connector, calls the idea behind the company "social discovery." What he means by that trademarked phrase is that people can use the service to tap the knowledge of their friends or family.

"A lot of social sites on the Web were asking the question: Who are my friends?" says Shahani, a 23-year-old former project manager at Avanade. "We didn't need to know who our friends were. We were really interested in, what can I learn from my friends, what can I learn about my friends?"

The 10-person startup, operating quietly from its Pioneer Square office space for more than a year, has already attracted $1.5 million from a group of angel investors that includes former Microsoft Senior Vice President Richard Fade and former Starbucks Senior Vice President Don Valencia. An additional $1 million in financing is in the works, though the company is spending most of its time these days rolling out the first public version of the service.

The site works like this. Individuals register with Blue Dot, at which time they are given a personalized page in the company's network and the ability to populate that page with content. The Blue Dot user who finds an interesting story on a news site could then hit a button in the browser -- labeled "Dot This" -- that automatically publishes the link to their Blue Dot page. Those links -- which also allow users to add detailed comments -- can then be viewed by friends, co-workers or any other community that the individual designates. Think of it as quick and easy blogging.

Furthermore, instead of e-mailing a group of friends to ask for restaurant or digital camera recommendations, Blue Dot users could simply search for suggestions among their friends' pages.

"It is a space for friends to stay in touch with each other in a non-interruptive way," explains Mohit Srivastava, the former Microsoft engineer who co-founded the company in October 2004.

The service is free to use, with Blue Dot planning to make money through targeted advertising and affiliate relationships with sites such as Amazon.com.

The concept is similar to Jookster -- another social networking company based in the Seattle area that allows users to "Jook " their favorite Web sites. Other companies in this arena include Newsvine, Digg and Judy's Book.

One major challenge facing Blue Dot and other social networking services is that people have only so much time in the day to create or share content. Right now, the vast majority of young people have decided they will spend that precious time building their profiles on MySpace and Facebook, said Ben Bajarin, a technology analyst at Creative Strategies. Facebook boasts more than 7.5 million registered users, while MySpace recently topped 85 million.

While new social networking services might gain some traction in the short term, Bajarin said it will be difficult to unseat the leaders.

"At the end of day, you could have a much superior technology, but people won't go there because their friends aren't going there," Bajarin said. "It really has to be something that gets the collective group to go."

While Bajarin said that MySpace experience is clunky and slow, he said it will be difficult to introduce a service that grabs new users. That's because he thinks young people only have the time to spend with one or two social networking services.

"The more people who come in and try to grab their attention, the more the water is going to get murky ... and they are going to stick with what they know," he said.

Srivastava, the company's 27-year-old Dot Pioneer, doesn't view MySpace as a competitor. In fact, he said a Blue Dot user can publish links to their MySpace page. Further, he said MySpace is more about self-expression, while Blue Dot is about sharing useful information with friends and family.

"My mom gets value out of Blue Dot because she can get relevant information from me," he says. "She can do searches on things she cares about because I am dotting and, likewise, I can do the same thing. You can't do that on MySpace. I can't find out that my mom is reading an article on MSNBC about cooking or recipes."

About 2,100 Blue Dot users have been testing the service over the past seven months, many of them students at the University of Washington. So far, those users have created 30,000 "dots," or online posts.

The company is hopeful that the Blue Dot community will grow through word of mouth, with momentum increasing as new members invite their friends. It also plans to build the audience by having members send weekly e-mails to friends with favorite stories, photos or videos on their Blue Dot page. To start with, Blue Dot is targeting young professionals in their 20s and 30s. But the company wants to build a big consumer Internet brand, with the idea of "dotting" becoming a household word.

Getting to that point will be a challenge, especially with all of the competition. But Srivastava thinks he has the team to get it done.

"It is crossing the chasm," he said. "There is the early adopter crowd and then, it is how do you get past that to the mainstream."

EPROJECT RAISES FUNDS: Eproject, whose project management software is used by more than 425 companies, has raised $6 million in venture capital and debt financing. The venture round follows a recapitalization last summer. With the recent funds, eProject has raised $10.5 million in the round of funding. Investors include Kennet Venture Partners and Genevest, with SVB Capital providing the debt financing.

The money will be used to grow sales, marketing and development, said Chief Executive Jeff Pancottine.

BLOG UPDATE: A quick look at some of the items appearing in my venture blog this week. Here is the link: blog.seattlepi.com/venture

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